A nuclear factor, EBP-80, purified in our laboratory as a transcription factor for intracisternal A-particle LTRs, has proven to be similar to or identical with a previously recognized human autoantigen, Ku. Ku is known to bind to the ends of linear duplex DNA. We have shown that end-binding is only one example of a more general property of EBP-80/Ku, namely its capacity to recognize and bind to transitions between single and double stranded DNA. Recently, Ku has been shown by others to mediate the binding and activation of a 350 kDa DNA-dependent protein kinase which can phosphorylate functionally important sites in pS3 and the C-terminal domain of RNA polymerase II. Using a highly purified kinase preparation provided by Dr. C. Anderson (Brookhaven), together with our own EBP-80/Ku preparation, we have shown that the kinase can be activated by circular DNA containing a bubble of non-homology or a short single-stranded region (gap), and also by a linear construct terminating in two stem-loop configurations. The kinase/EBP-80 complex is not activated by completely duplex closed circular DNA. With Dr. M. Falzon (Galveston), we are defining the minimal and optimal bubble and gap sizes for binding and activation. EBP-80/Ku, by binding to the transcription bubble, may bring the protein kinase into a position where it can carry out the necessary phosphorylation of the RNA polymerase C-terminal domain. Ku is generally considered to be almost exclusively localized in the nuclei of interphase cells. We have found, however, by both immunostaining of fixed cells and Western blots of cell extracts, that Ku antigen is primarily cytoplasmic in very sparsely grown cells, including HeLa and primary human keratinocytes. The proportion of nuclear antigen increases with cell density until the typical nuclear distribution is observed in confluent cultures. Sparse cells plated onto a monolayer of mouse 3T3 fibroblasts rapidly acquired the exclusively nuclear localization, suggesting that the redistribution of Ku from cytoplasm to nucleus is a response to cell-cell contact.